How High Can Bitcoin Go Now That It's Hit Its All-Time High?

Forbes

Mike Belshe, the CEO and founder of BitGo, joins "Forbes Talks," to discuss Bitcoin's price action following its new all time high.  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00 Hi everyone, I'm Rose Marie Miller here with Mike Belshi, the CEO and founder of BitGo,

00:08 here to tell us about Bitcoin reaching new all-time highs. Thank you so much for joining

00:13 me today, Mike. Great to be here. Thank you. So Mike, Bitcoin just reached a new record

00:20 high of $69,200, surpassing its previous high of $68,990 set in 2021. What's behind the

00:30 sharp rise this year? Well, I think it's all the news that we've been building towards

00:36 over the last nearly a decade now. The main driver here, of course, is the approval of

00:42 the ETFs that happened in January. And all of a sudden, there's a distribution channel

00:47 where people can access direct exposure to Bitcoin, which is larger than any distribution

00:53 channel we've ever had. And of course, that's the traditional financial markets here in

00:57 the United States. All of the ETFs have been bringing a tremendous amount of flow. From

01:04 the folks that have been in this for a long time and BitGo, we've been doing this since

01:08 2013. We like what's going on with Bitcoin in terms of providing an asset that's got

01:15 a monetary policy that is static and fixed. So you hear about this a lot, that there's

01:20 a fixed supply. And as more people learn about the advantages of a fixed supply value storage

01:28 system, they realize, wait a minute, the systems we've been using, dollar denominated or fiat

01:33 denominated in other countries, has a lot of weaknesses by comparison. And so all of

01:38 a sudden, everybody's looking at what's going on at the government monetary policy level.

01:43 There's a tremendous amount of uncertainty and people like, I don't know what's going

01:47 to happen with the US dollar. Is it going to remain the reserve currency of the world

01:51 forever? Well, probably not. Is that going to go in a cycle that's going to harm me?

01:55 Maybe. I think I ought to have some Bitcoin in my portfolio. And here's the really simple

02:00 way that retail investors and others can think about it. You can take 2 or 3 percent of your

02:07 portfolio today and you can put it into Bitcoin. And the worst case is that you will be too

02:13 to 3 percent poorer tomorrow down the line. That's the worst case. And by the way, it's

02:18 still a bit experimental. There is still risk. There's a lot of volatility. All of those

02:21 things are true. You should be buyer beware for sure. But the upside potential of it is

02:27 basically unbounded. So when do you have an opportunity in your lifetime to enter into

02:32 something that's got that kind of asymmetric downside and upside potential? It just it

02:38 just doesn't happen very often. And just to make sure you don't think this is me, a little

02:41 tiny crypto bitco company doing this. Fidelity. Fidelity has a group of funds. I think it's

02:48 called the all in one or all in one fund or something like that. They just announced,

02:53 I think it was last week, that their portfolio recommendation and they've got kind of three.

02:57 They got a conservative and a medium and a high risk. The conservative one is a 1 percent

03:02 crypto allocation. Medium is 2 percent. The higher risk is 3 percent. The only thing I

03:07 disagree with on their numbers is I think those should be ratcheted to 3 to 5 percent

03:10 instead of 1 to 3 percent. But even the guys that have been doing this for a long time.

03:15 Remember, Fidelity is the top two asset managers on the planet. And the other one is Blackrock.

03:23 Also a major ETF in the Bitcoin space. Their CEO, Larry Fink, is all over digital assets

03:31 and crypto and looking to move deeper into that space. So anyway, a lot of validation

03:36 has happened. A lot of regulatory uncertainty has gone away. Distribution channel to millions

03:40 of people and frankly, a backdrop where fiscal policy for fiat is really demonstrating the

03:48 value of why you would want to be participating in Bitcoin.

03:51 Well, Mike, we kind of touched on retail investors and the institutional investors. Who's doing

03:57 the buying right now that is responsible for this price rise?

04:03 It's interesting. You see a lot of speculation out there. I've met with a number of our investors

04:08 that are traditional financial guys that are all over this. And typically what people say

04:13 is they're seeing small ticket sizes. What that means is it doesn't look indicative of

04:17 tremendous amounts of institutional flow. I think institutional flow is ticking up a

04:22 little bit. But remember, the ETF was approved in January. Institutions move pretty slowly

04:29 and conservatively. I don't think that anybody was like saying, "Oh, OK, it's definitely

04:33 going to be approved in January." Instead, they wait to see that happen. They wait to

04:37 see what the initial fallout, shakeout is of the 11 different ETFs that will get launched.

04:41 And then they go to their investment committees and they start to push forward after that.

04:45 So I think the institutions are yet to come. I think this has been largely retail driven.

04:49 That is, those are calling up their brokers and they couldn't do it before. It was too

04:52 intimidating to get access to Bitcoin, kind of doing it on your own and holding your own

04:57 keys and things like that. And this is actually very encouraging, I think, for the space,

05:02 because there's a lot of people saying this is the institutional money. I think the institutional

05:05 money is yet to come.

05:07 Well, are there any other factors that can contribute to the price going up? And are

05:13 there any factors that could make the price go down?

05:15 Look, there's a lot of risks. Let's talk about the downside risks, right? This is a relatively

05:20 new technology. Now, it's not that new. It's been around for 15 years. It's run incredibly

05:25 resiliently. It's had a constant fiscal policy. It's the only system in the history of mankind

05:33 which has had an untinkered fiscal policy of any other system. And that's because humans

05:40 usually like to tweak things, right? Suddenly you're making money and you're like, hey,

05:44 why don't we tweak it to make a little more money? But Bitcoin doesn't do that. It's very

05:49 static. So there's a lot of stability of being around for 15 years, but it is still relatively

05:55 new. Is it possible that we would have a major hiccup somewhere in the technology? I suppose

05:59 it's possible. There's some threats around quantum technology, which some people are

06:03 worried about. I think those will be mitigated pretty easily as they come. But you can't

06:08 fully dismiss it. And then, you know, regulatory action. Remember, money is power. And what

06:14 we're seeing right now is a lot of political forces starting to galvanize and organize

06:21 against Bitcoin because they see this as a threat to their power. Now, my view of this

06:25 is that any of these threats are short term. For the long term, I think Bitcoin has staying

06:31 power. Remember, Bitcoin is the form of money that returns the power to the people and returning

06:38 power to the people. We've seen it in history. It can be brutal. It can take time. But at

06:43 the end of the day, the people win. And this is a system which puts all of us as individuals

06:48 at the exact same priority as every banking, financial institution, Goldman Sachs, JP Morgan,

06:54 etc. And where do you want to be? You know, when the going gets tough, do you want to

06:58 be in control of your own destiny or do you want to be dependent on those other parties?

07:03 So there is risk. Sorry.

07:05 Well, no worries. We're seeing new all time highs. I'm kind of wondering, should people

07:13 have panicked so much when Bitcoin was at what, like 16, 17 thousand?

07:19 Look, there's a lot of education here. This is a different monetary system. So my own

07:25 experience, I mean, you know, maybe I learned about Bitcoin earlier, but I'm not some super

07:29 genius that just like instantly saw this for what it should be. It's a radically different

07:34 system. You know, we all spend our time thinking so much about the money that we receive in

07:39 exchange for the hard labor and work that we do. But do we think about the system that's

07:44 behind it? How does it work? What is the value of money? You know, when I started in the

07:49 system, there was the major complaint against Bitcoin is that it's backed by nothing. It

07:53 can't be worth anything. Well, what is fiat backed by? It's also backed by nothing. And

07:59 if you ask or survey Americans to this day, you will hear a significant portion of them

08:06 think that somehow money is still backed by gold. That's a fiction. It's just simply not

08:10 true. Pretty much all of the currencies around the globe are fiat based. Anyway, so it's

08:15 no surprise that you come out with this thing that's crazy. It's Bitcoin. It's founded by

08:20 some guy named Satoshi. Nobody knows what it is. There's like mining and you have to

08:24 do these, you know, proof of work with juices, a lot of energy. Of course, it takes time

08:30 to get your head around like what are each of these components and how do they work?

08:33 But at this point, it's been heavily scrutinized. I'm probably one of the smaller players, like

08:39 I mentioned, you know, Larry Fink over at BlackRock. Of course, he was slow to the game.

08:44 Fidelity got into this in like 2016 with Abby Johnson going full in. And of course, down

08:49 the line, whether you're talking about Paul Tudor Jones or Anthony Scaramucci, like folks

08:54 that are major financial investment advisors are all looking at this as saying, OK, this

08:59 passed the muster of like it's legitimate. And now we can start to think about how does

09:03 that really impact change from the way the traditional financial system has operated

09:09 for so long.

09:10 And speaking of traditional finance, since now they're kind of in bed with Bitcoin, does

09:16 that make a difference with Bitcoin's current all time high? Whereas, you know, we had all

09:20 these strange players who are kind of out of the way now. Is it different this time?

09:27 Well for sure it is. You know, these are parties that are highly trusted, you know, in the

09:32 financial system. Some would argue that they shouldn't be. I think they deserve a lot of

09:37 credit for building kind of things the way they are. Many people put their investments

09:43 in their hands. So forget about Bitcoin for a moment. I mean, imagine if, you know, I

09:47 don't know who your broker is. Maybe it's Charles Schwab, maybe it's TD Ameritrade,

09:50 whatever. Imagine if you logged into your brokerage account one day and everything said

09:54 zero. It could happen, right? But you probably don't think about that very often. But there

10:00 could be a glitch in the system. There could be a mistake. The broker that you trust 100

10:04 percent with all of your money could just say, oh, no, we don't have any record of that.

10:08 Sorry. See you later. Look, Bitcoin changes this, right? Bitcoin actually makes it so

10:13 it is transparent. Now, when you buy through a broker, it's got some of those same issues.

10:17 But these trusted parties have been working with investors. Of course, if lots of people

10:21 had zero showing up unexpectedly in their bank accounts, they wouldn't have a lot of

10:24 customers. So obviously, they work hard to make sure that that doesn't happen. Having

10:29 them participate in the ecosystem validates, helps make it so that we can distribute this

10:34 to more people. As we distribute it to more people, it gets more stable. The volatility

10:38 goes down. Tremendous number of benefits. Lastly, on the regulatory side. Now, look,

10:42 this is operating through the approved system of the U.S. government. The SEC established

10:48 back in the 30s. The main tenants of the SEC were also established in the early 40s. They've

10:54 been evolving quite a bit. But when you look at how do you manage assets in a safe way

11:00 for U.S. retail investors, we now have a product which completely fits within those rules.

11:06 Well, thank you so much for joining me today, Mike.

11:11 Thanks for having me.

11:11 [END]

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